The Revolving Door of Corporatism Continues

This is just in from CNBC’s John Carney: a key advisor to U.S. President Obama will leave the Federal Housing Authority where he is a regulator of the mortgage industry and make a beeline straight for the industry he once oversaw. When David H. Stevens announced he was leaving the FHA last week he said he had no future plans. Now, apparently he is going to head the Mortgage Bankers Association, the chief lobbyist for the industry he regulated.

John writes:

"If Stevens had generally been less friendly to industry — had he decided to let the mortgage market fall more freely or punish lenders more harshly (that is, had he been more Right or more Left) — would industry have considered hiring him?" my brother Tim Carney asks at The Washington Examiner. "The incentives for powerful bureaucrats are to be ‘responsible’ and ‘pragmatic’ — which usually means friendly to the industry you’re regulating and subsidizing."

Tim goes on to point out some other top Obama officials cashing out to work for big banks:

Deputy White House Chief of Staff Mona Stephen, now a lobbyist for UBS.

White House Counsel Greg Craig, who went to Goldman Sachs

Budget Director Peter Orszag, who went to Citigroup

Labor Department aide Oscar Ramirez who represents Bank of America at the Podesta Group

Top Treasury Department aide Damon Munchus, who now lobbies for Citigroup and the International Swaps & Derivatives Association, among others.

This is a far cry from what some of us expected when candidate Obama pledged he was "closing the revolving door."

"No political appointees in an Obama Administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years," Obama wrote back during the 2008 campaign.

Ain’t democracy grand?

Stevens will certainly be a ‘voice of reason’ in private industry telling the bankers what the Obama Administration thinks about the banking industry. I’m sure he can pass on the message that Obama is ‘business-friendly’. And he can certainly advocate for the mortgage deal that the Obama Administration wants to get passed as well. I’m sure you know "what the mortgage deal in the works reveals about the Obama Administration": "It is very important that we try to bring this to bed as quickly as we can," Geithner told the Senate Banking Committee. (via Reuters).

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

We need a 1 year ban on such revolving door moves. This breeds corruption.

Anonymous says 8 years ago

I really wish the blatant nature of these things would put any notion of a left-right paradigm to rest for the major media, so thinking people can get to work on a cross-ideological solution to our problems. But it seems this is just not newsworthy for any of the major networks who continue to point fingers based on perceptions of political allegiances that haven’t existed for 40 years.

Obama has already blown his opportunity to walk-the-walk with the Wisconsin unions. Many on main st were shocked and disappointed.

Anonymous says 8 years ago

I really wish the blatant nature of these things would put any notion of a left-right paradigm to rest for the major media, so thinking people can get to work on a cross-ideological solution to our problems. But it seems this is just not newsworthy for any of the major networks who continue to point fingers based on perceptions of political allegiances that haven’t existed for 40 years.

Obama has already blown his opportunity to walk-the-walk with the Wisconsin unions. Many on main st were shocked and disappointed.

DavidLazarusUK says 8 years ago

It is another shining example of how corrupt US politics is. If you are looking for a job in the industry that you are regulating how can you do the job well? This is not unique to the US, it happens in the UK as well. It needs to end.

The brazenness of American corporatism is what I find shocking. And it’s accepted as if that is how things should happen. Where’s the outrage?

DavidLazarusUK says 8 years ago

What they are doing in failing to regulate is no better than Bernie Madoff in that that they are allowing millions of taxpayers and citizens be ripped off by corporations. They need to do some serious jail time.

Anonymous says 8 years ago

It is another shining example of how corrupt US politics is. If you are looking for a job in the industry that you are regulating how can you do the job well? This is not unique to the US, it happens in the UK as well. It needs to end.

The brazenness of American corporatism is what I find shocking. And it’s accepted as if that is how things should happen. Where’s the outrage?

Anonymous says 8 years ago

What they are doing in failing to regulate is no better than Bernie Madoff in that that they are allowing millions of taxpayers and citizens be ripped off by corporations. They need to do some serious jail time.